Chinese Power Companies Could Crash the GM, Ford Electric Vehicle Party in China

China, the largest auto-market, will reportedly impose energy-saving and emission reduction measures in the 12th Five-Year Plan period (2011-2015). [1]

This will support growth of electric vehicle sales and hybrid vehicle sales in the middle kingdom over the medium-term, spelling good news for auto-makers such as General Motors, Ford, Toyota, Honda and Tesla Motors, which have been investing heavily to develop their fuel-efficient vehicle line-up and in electric vehicle technology.

However, China’s power-grid giants – China Southern Grid and State Grid – can throw a wrench in these plans by insisting on battery swap as a principal operational mode in support of the country’s efforts in vehicle electrification, which will be difficult to implement given the present technology level. [2]

The two operational modes that can support electric vehicles battery charging are battery swapping and charging mode. In battery swapping mode, user can swap a new battery once his older battery runs out of charge. This will require standardized battery pack for all vehicle, which is difficult to realize with the current technology and which can possibly lead to monopoly by Chinese power grid majors in electric vehicle charging facilities.

Power grids argue that battery technology isn’t developed enough to support fast charges and also that through battery swap, battery will be separate from cars, thus allowing auto-makers to sell EVs without batteries and lowering initial cost for consumer.

The normal charging mode requires connecting electric-vehicles to a power source for overnight charging. Some argue that installing charging poles will be a cheap and convenient alternative to massive charging stations.

Amongst Chinese users, most prefer normal charging poles over battery swapping, according to a survey. [2]

While most auto-makers are looking at China for growth with the global economic crisis taking a toll on auto sales in Europe and the U.S., such a debate will add to their uncertainty and willingness to invest. GM plans to start importing Chevrolet Volt for sales in China this year and has also announced that it would develop electric cars in China through a joint venture with a Chinese automaker and would transfer battery and other electric car technology to the venture. [3] Toyota also plans to produce all-electric vehicles for China market next year. [4] Similarly, Ford and Honda are mulling building electric vehicles in China [5] [6]

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